Federal Enforcement Actions
The second Tuesday of each month, practice managers and industry service providers gather for an educational Nashville Medical Group Management Association (NMGMA) meeting at Saint Thomas West Hospital.
The July meeting focused on "Federal Enforcement Actions," and featured Matthew Kroplin and Jim Hoover, both partners in the Health Care Practice Group for Burr & Forman LLP. Kroplin, who is based in Nashville, outlined some of the key areas that continue to catch the attention of federal investigators from a number of agencies ranging from the Department of Justice and Health & Human Services to the Federal Bureau of Investigation and Drug Enforcement Administration. Hoover, from the law firm's Birmingham office, discussed enforcement actions and ways to avoid missteps.
"Recent trends offer guidance for current risk assessment and compliance planning," noted Kroplin. By reviewing areas of interest to federal agents and the outcomes of those investigations, practices can learn from the mistakes of others in order to build a better compliance program.
False claims, failure to comply with HIPAA privacy and security rules, and violations of Stark Law and the Anti-Kickback Statute, remain major areas of focus for investigators. Under that large umbrella, Kroplin said some recent themes have emerged including increased scrutiny on physician compensation, medical necessity, telemedicine, proper prescribing, laboratory usage, quotas and HIPAA.
"Physician compensation agreements continue to be a significant focus of the federal government," Kroplin said, adding there is an emphasis on relationships that violate or allegedly violate Stark and Anti-Kickback. When physician groups are negotiating a compensation agreement, Kroplin said they need to stop and adequately analyze the terms in light of healthcare regulatory laws. "Make sure it can stand up to scrutiny, looking at fair market value for services rendered and the source of the revenue," he advised.
Along those same lines, he said practices should also beware quotas where salary or bonuses are tied to the expectation that a provider perform a procedure so many times a month. Other recent cases that resulted in multimillion dollar fines, included paying full-time compensation to a specialist working less than full-time hours and providing staff and office space on top of physician salary that resulted in a compensation package in excess of fair market value.
"Another notable trend involves medical necessity," Kroplin continued. "These enforcement actions are based not only on the theory that unnecessary medical services were provided but also on the theory that services actually provided were not adequately documented."
In other words, he continued, a practice can get in trouble not only for upcoding or providing unnecessary services but also for providing services where the contemporaneous record doesn't adequately document the need. "How do we know this was medically necessary?" Kroplin asked. "There's more to medical necessity than what we traditionally think about," he added.
Tests ordered but not reviewed, high volumes of specific or similar procedures, unnecessary prescriptions and duplicative coding are all red flags for auditors. A health system recently had to pay more than $60 million for medically unnecessary inpatient stays when an outpatient or observational stay would have sufficed.
Hoover said there has generally been an uptick in false claims investigations. He added, qui tam ... or whistleblower ... cases, where lawsuits are filed in federal district court by private citizens, have made up the bulk of his false claims work recently.
Often the whistleblower, known as a relator, is a former employee of the practice. "Occasionally it could be one of the other doctors in the group," Hoover added. He noted the reason for bringing a qui tam suit varies from legitimate concern over billing and compensation practices to a disgruntled employee. "A relator gets a share of the recovery plus attorney's fees so there is a financial incentive, as well," he pointed out.
Conversely, there's little downside to such an action for a relator. "The False Claims Act statute allows for the defendant to recover attorney's fees if they prevail," Hoover said of the possibility that a relator would be forced to pay legal fees for the practice or physicians. However, he continued, "I have never seen that in any of my cases."
When an allegation is made, a lawsuit is filed under seal. The U.S. Attorney's office investigates by interviewing witnesses, analyzing data and obtaining claims records from the affected government agency. Hoover said the government typically issues a CID - Civil Investigative Demand - that is very similar to a subpoena requiring documents, answers to interrogatories (written answers) or depositions (oral answers under oath).
Because each incorrect billing claim carries a penalty, Hoover said the numbers can get really big in a hurry. "These cases tend to settle if not dismissed because the damage calculations can be so high," he noted.
If a practice is issued a CID, Hoover said the first order of business is to "call their attorney immediately." He said it's important that any response or internal investigation be protected by attorney-client privilege. He added tight timetable requirements mean it is also helpful for the attorney to quickly establish a relationship with the U.S. Attorney's office to work out scheduling.
Of course, Hoover said an even better plan is to avoid False Claims and qui tam actions in the first place. "Review compensation plans to make sure they don't include prohibited revenue sources and make sure it's fair market value for services rendered," he said.
"Have a robust compliance program and proactively audit records in real time," he continued of catching mistakes and making adjustments before timely billing requirements have passed. However, he noted, that's not always possible. At whatever point a mistake is realized, it's far better to proactively be the one to correct the error than to hope no one notices.